Great graft crackdown

Most coverage of last month’s G20 summit in Korea focused on the awkward photographs of the leaders of the largest 20 economies and concern about currency exchange rates was paramount.

But, largely buried from view, negotiators hammered out an impressive agreement on a subject everyone loves to talk about but few tackle head-on—the scourge of corruption.

In the wake of International Anti-Corruption Day on December 9 these commitments deserve some attention and action.

Without them the G20 agreements will remain just words and the world will have missed a great opportunity to cleanse the system—a system that almost came to grief in 2007-2008, in part because of a culture of opacity that hid a range of practices that are costing ­taxpayers trillions of dollars.

The G20 recognised what we have seen far too often in Africa—corruption standing in the way of economic growth, undermining the rule of law and destroying public trust.

The non-profit Global Financial Integrity estimates developing countries lose $1-trillion annually to crime, corruption and tax evasion. For most African countries, cutting corruption by half could dramatically reduce aid dependence and in some cases end the need for aid altogether.

Thankfully, the G20 did not engage in finger-wagging at poor countries. It laid out an action plan against corruption for G20 members themselves to take in clear and specific ways.

Fighting corruption
We wish they had gone further in several respects but, if these proposals are implemented and enforced by all G20 nations, the G20 will have changed the game in fighting corruption and proved its worth as the new forum for effective global action.

Broadly, it called for ratification of the UN Convention against Corruption by all G20 members—so far 16 G20 countries have ratified it and the European Union has approved it - and then full implementation of all the measures by all nations.

Specifically, it called for action in four areas. First, the statement asks all G20 nations to make it a crime to bribe foreign public officials. It may be a shock to some that this isn’t already law but the fact that it is overdue makes it no less welcome.

Second, an important bundle of measures was agreed on. If properly implemented, these would be the real key to tackling corruption at a national and global level, stopping criminals from accessing the global financial system to launder stolen money and recovering that money if it has already been laundered.

Steps were agreed on to anticipate the problem by building on existing lists of high-risk, politically exposed individuals around whom, and especially around whose family members, extra vigilance is required by the global banking system.

Where the proceeds of crime have already been stashed away, measures were agreed on to help track down these funds and recover them for the states from which they were stolen.

This requires heightened levels of international cooperation and the enforced transparency of weak links in the international financial system. The G20 agreed to make these criminals pariahs - their ability to get visas for, or to educate their children in, any G20 country has technically come to an end.

Third, the importance of protecting and encouraging whistle-blowers was explicitly recognised. Across Africa a number of high-level anti-corruption officials have been run out of their countries in recent years, making a mockery of such grand global resolutions. It is the criminals who should be fearful, not those who expose them.

Finally, but too briefly, the importance of integrity, transparency and accountability in public finance—management was recognised.

G20 and global finance
This plan can be made real if specific resources are now supplied to protect whistle-blowers, support legal teams to track down stolen money and help finance the strengthening of public financial management, and if all financial centers are made fully transparent.

You could say that the G20 needs to offer more finance for global transparency and more—transparency for global finance.

The G20 was shamefully silent about an area in which the United States has recently led—to its immense credit. This is the enforcement of transparency in the energy sector, especially when it comes to payments by multinational oil and gas companies to officials in developing countries.

All companies on the New York Stock Exchange must now make all payments to developing country officials fully transparent, thereby removing opportunities for corruption in highly lucrative resource extraction negotiations.

All other stock exchanges that lay claim to global leadership, starting with the London Stock Exchange, must urgently implement similar measures - unless they are happy to be seen as competing for the proceeds of crime.

With regard to procurement in the security sector, a measure as simple as having leading defence contractors name their agents and brokers in Africa would help mitigate conflict and some of the most insidious forms of corruption.

It is now the turn of France to host both the G8 and G20 summits in 2011. France has a mixed record when it comes to implementation of transparency and anti-corruption measures, so this could be a mixed blessing - and French progress must be monitored closely. But sometimes the best gamekeeper is the reformed poacher. Promisingly, French President Nicholas Sarkozy has publicly relished this agenda.

It is also not just down to one man or one country to fight global corruption. There isn’t just one rotten apple in this barrel. The global financial system requires vigilance by many players at many levels and, especially by members of the media and civil society, across the developing, emerging and developed world, who must work ever more closely together to keep an eye on the implementation of the G20’s fine words—as well as to demand further improvements.

John Githongo is the chief executive of the Inuka Kenya Trust, a former permanent secretary in the office of the president in charge of governance and ethics, and an adviser to the anti-poverty campaign group, one.org

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